Up to 55 top civil servants in line for €600,000 'gold' deals
Published 10/09/2011 | 05:00
UP TO 55 senior civil servants are in line for gold-plated exit packages worth up to €634,000 if they retire by February when punitive new pension rules kick in.
The packages come close to the €700,000 that retired government secretary Dermot McCarthy walked away with. The Irish Independent has learned that at least 55 other high-flying civil servants are entitled to lucrative six-figure deals, but only if they sign up for them by November. Many will be tempted to get out early to avoid pensions cuts of up to 15pc, due to come into force three months later.
Most of the 55 senior workers will get packages worth around €300,000 if they retire, but higher grades would be entitled to more than double that.
The high-fliers due to leave include Sean Gorman, secretary general of the Department of Enterprise, who is retiring after 40 years’ service.
It is understood he will be entitled to a similar package to Mr McCarthy, which will allow him to walk away with as much as €634,000.
Many more at senior levels are poised to join a massive exodus of public servants in the coming months.
Government sources said they were expecting as many as 10,000 to retire across the entire public service this year.
This is twice as many state employees as would normally retire from the public service in a year.
Public Reform Minister Brendan Howlin has set a November deadline to help spread out the impact. But the Government cannot say where the retirements will hit services hardest.
The 55 senior civil servants are at assistant secretary grade or above, and are entitled to immediate payment of their pension benefits.
Another 175 staff in the same grades are also eligible to retire early.
Pensions will be slashed after next February, because they will be based on wages after the pay cuts imposed by the Government last year.
At the moment, pensions are still based on salary levels before those pay cuts, which ranged from 5pc to 15pc.
Civil servants in secretary general grades stand to get the most generous golden handshakes.
A secretary general in the middle of the pay scale with full service of 40 years would get a deal based on their €253,635 annual salary before the pay cut.
They are entitled to a gross pension gratuity of €380,452, a special severance payment of €126,817 and annual pension of €126,817.
This is roughly double the maximum package of €317,288 for assistant secretaries general, who are not entitled to a special severance payment.
Speaking to the Irish Independent, Junior Finance Minister Brian Hayes admitted that the special severance payment for secretaries general -- which was introduced in 1987 as a "carrot" to attract civil servants to top jobs -- should be looked at.
He also described public sector pensions as "gold-plated" and promised major reforms in the Budget.
"I think it is embarrassing in the current economic environment and the hardship that people have to face in this country that these amounts have been given out," he said.
But the Government said it was unable to stop the payments because they were part of the terms and conditions.
And the Department of Finance denied that the Cabinet had any choice but to sign off on the special severance payments and extra pension benefits.
These perks were awarded to secretaries general to make up for the fact that their contracts only last seven years and they are not guaranteed another job, although many are kept on.
The Government can award up to 10 extra years' service to secretaries general, and it is understood that Mr McCarthy got another two added.
The retirements will put a huge upfront cost on the Exchequer next year. It is likely to cost more than double what it would have paid to keep the same public servants in work.
Savings will only be reaped in the coming years, as the retirees are not replaced.
The public sector workforce stood at just over 305,000 at the start of this year and is predicted to drop to 295,000 at most following the hike in retirements.